STUTTGART, Germany (Reuters) - German carmaker Daimler (DAIGn.DE) scrapped its dividend for the first time in 14 years after it swung to a worse-than-expected 2009 net loss, sending shares down to their lowest level in five months....More
Showing posts with label Daimler. Show all posts
Showing posts with label Daimler. Show all posts
Thursday, February 18, 2010
Daimler Mercedes-Benz scraps dividend after 2009 loss
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Daimler,
Mercedes-Benz
STUTTGART, Germany (Reuters) - German carmaker Daimler (DAIGn.DE) scrapped its dividend for the first time in 14 years after it swung to a worse-than-expected 2009 net loss, sending shares down to their lowest level in five months....More
Wednesday, August 19, 2009
Chrysler's Creditors Sue Daimler Over Transfers Before 2007 Sale
David McLaughlin
Chrysler's creditors say German auto maker Daimler AG intentionally defrauded them through a restructuring of Chrysler on the eve of its 2007 sale.
In a new lawsuit filed against Daimler, the creditors offer new details about their claims that Daimler stripped Chrysler of billions of dollars in assets for its own benefit before unloading the struggling U.S. auto maker.
"These exchanges enriched Daimler at the expense of the many Chrysler creditors who now are unable to look to these assets to satisfy their claims," the creditors said in the complaint.
The lawsuit, filed with the U.S. Bankruptcy Court in Manhattan Monday, comes after a judge ruled last Thursday that committee representing Chrysler's unsecured creditors could sue Daimler in an effort to increase their recovery from Chrysler's bankruptcy case.
A Daimler spokeswoman, Julia Engelhardt, said the claims in the lawsuit "are without merit."
"We will vigorously defend ourselves against these claims, which we believe are completely baseless," she said.
Creditors say that in early 2007, as Chrysler struggled under a heavy debt load and falling auto sales, Daimler faced the risk that it could be on the hook for billions of dollars in Chrysler obligations, including $17.5 billion for retiree health benefits and $5 billion in unfunded pension costs.
To avoid this risk, Daimler decided to unload Chrysler, which it bought in 1998. But before doing that, creditors say, it orchestrated the restructuring plan in the spring of 2007.
Under the plan, Daimler transferred valuable Chrysler assets to other Daimler-controlled entities. It also left assets in the group of Chrysler companies but separated them so they were no longer subject to claims from creditors, making them more valuable.
The lawsuit says the "most egregious" of these steps came when Daimler transferred Chrysler's most valuable business - its U.S. and Canadian financing subsidiaries - to a new Chrysler holding company.
By becoming a sister company of Chrysler rather than a subsidiary, the finance arm escaped potential creditor claims, according to the lawsuit. As a result, Daimler got a "substantially better price" for Chrysler when it sold an 80% stake to Cerberus Capital Management in 2007 for $7.4 billion.
After filing for bankruptcy in April, the bulk of Chrysler assets were sold to a new company owned by Fiat SpA, the U.S. and Canadian governments and the United Auto Workers union.
Besides Daimler, the lawsuit names four former members of Chrysler's board of directors. The complaint seeks unspecified damages.
Lawyers for the creditors committee say any proceeds from the lawsuit would go to paying off creditors, a group that includes the U.S. government and secured lenders that received $2 billion from the bankruptcy sale, giving them a recovery of about 29 cents on the dollar.
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Chrysler's creditors say German auto maker Daimler AG intentionally defrauded them through a restructuring of Chrysler on the eve of its 2007 sale.
In a new lawsuit filed against Daimler, the creditors offer new details about their claims that Daimler stripped Chrysler of billions of dollars in assets for its own benefit before unloading the struggling U.S. auto maker.
"These exchanges enriched Daimler at the expense of the many Chrysler creditors who now are unable to look to these assets to satisfy their claims," the creditors said in the complaint.
The lawsuit, filed with the U.S. Bankruptcy Court in Manhattan Monday, comes after a judge ruled last Thursday that committee representing Chrysler's unsecured creditors could sue Daimler in an effort to increase their recovery from Chrysler's bankruptcy case.
A Daimler spokeswoman, Julia Engelhardt, said the claims in the lawsuit "are without merit."
"We will vigorously defend ourselves against these claims, which we believe are completely baseless," she said.
Creditors say that in early 2007, as Chrysler struggled under a heavy debt load and falling auto sales, Daimler faced the risk that it could be on the hook for billions of dollars in Chrysler obligations, including $17.5 billion for retiree health benefits and $5 billion in unfunded pension costs.
To avoid this risk, Daimler decided to unload Chrysler, which it bought in 1998. But before doing that, creditors say, it orchestrated the restructuring plan in the spring of 2007.
Under the plan, Daimler transferred valuable Chrysler assets to other Daimler-controlled entities. It also left assets in the group of Chrysler companies but separated them so they were no longer subject to claims from creditors, making them more valuable.
The lawsuit says the "most egregious" of these steps came when Daimler transferred Chrysler's most valuable business - its U.S. and Canadian financing subsidiaries - to a new Chrysler holding company.
By becoming a sister company of Chrysler rather than a subsidiary, the finance arm escaped potential creditor claims, according to the lawsuit. As a result, Daimler got a "substantially better price" for Chrysler when it sold an 80% stake to Cerberus Capital Management in 2007 for $7.4 billion.
After filing for bankruptcy in April, the bulk of Chrysler assets were sold to a new company owned by Fiat SpA, the U.S. and Canadian governments and the United Auto Workers union.
Besides Daimler, the lawsuit names four former members of Chrysler's board of directors. The complaint seeks unspecified damages.
Lawyers for the creditors committee say any proceeds from the lawsuit would go to paying off creditors, a group that includes the U.S. government and secured lenders that received $2 billion from the bankruptcy sale, giving them a recovery of about 29 cents on the dollar.
Wednesday, November 26, 2008
Chrysler News-Daimler struggles to shed Chrysler
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Chrysler News,
Daimler,
shed Chrysler,
struggles
Chrysler News
Tom Krisher / Associated Press
DETROIT -- Daimler AG says talks to sell its remaining stake in struggling automaker Chrysler Holding LLC have stalled because of exaggerated demands from Chrysler owner Cerberus Capital Management LP.
Daimler says Cerberus is making demands that exceed the value of the private equity firm's investment in Chrysler. It also says Cerberus is claiming Daimler provided incomplete information about Chrysler.
Daimler sold 80.1 percent of Chrysler to Cerberus last year in a $7.4 billion deal. Cerberus is trying to buy the remaining 19.9 percent stake and is in talks to sell Chrysler.
A message left for a Cerberus spokesman wasn't immediately returned.
Stuttgart, Germany-based Daimler said in a statement Wednesday that Cerberus has alleged "conduct outside the ordinary course of business by Daimler during the time between signing and closing of the transaction, as well as an allegation of incomplete information about the business."
Cerberus and Daimler signed the deal May 14, 2007, and the sale closed Aug. 6, 2007.
Daimler spokesman Han Tjan declined to give details of the allegations but said they are untrue.
"We reject these allegations as being completely without substance," Tjan said in a telephone interview.
Cerberus, a New York private equity firm, is making financial claims that go "beyond the framework of the contractually agreed possible obligations under representations and warranties," Daimler's statement said.
Since Cerberus acquired Chrysler, U.S. auto sales have dropped substantially. Chrysler sales fell 35 percent in October from a year earlier and are down 26 percent for the first 10 months of this year.
Cerberus has recorded substantial losses since it purchased the majority stake in Chrysler: $1.6 billion last year and $1.28 billion in the first half of this year.
Since Chrysler is privately owned, the company does not have to report its earnings, but they can be calculated from Daimler's balance sheet.
Auburn Hills-based Chrysler, along with other U.S. automakers, is seeking federal loans to stave off running out of cash. Cash-starved General Motors Corp. reportedly had been in talks last month to buy Chrysler.
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